How SMSF advisers are making money
28 July 2014
The annual SPAA survey is out and it gives a profile of who is involved in the industry from the professional adviser side. Most of the providers are offering multiple services: on average 4.8. Accounting and financial planning are the biggest earners -- reflecting where many of these providers started out -- but they also earning significantly from SMSF administration, life insurance, share trading and estate planning.
It is worth going through a few snapshots of what the SMSF advisory industry looks like.
Three out of four began as accountants of financial planners:
Thos who started out as accountants have an average revenue of $2.2 million, average profit $547,000, 17.7 staff, 2.9 offices, 1,159 clients and 140 SMSFs. Those who started out as financial planners don't do as well. They have half the profit, have the revenue, half the number of staff, about the same number of offices and less than half the number of clients and SMSFs.
It compares interestingly with those that started out as SMSF businesses:
There is great advantages in scale for SMSF service providers. They do this by offering a wider range of services. Providing services for SMSFs is not necessarily profitable, as the following graph shows. Scale matters:
Unsurprisingly, word of mouth is the best way to get clients, but web sites and social media also are important: